Why do I spend so much time reading about Bitcoin and writing about Bitcoin and telling others about Bitcoin? I do it because I want the world to be a better place. Historically, I have given money to many charities to try to make the world a better place. I think that is still a good thing to do. But I’ve always wondered why the world is so messed up in the first place? Many things don’t seem to work.
At a more naive point in my life I told a friend “I want to work to get rid of money.” Because I had this feeling that somehow money was making the world a worse place. I have obviously grown in my thinking immensely since then.
I now see money as the clear tool it is to foster trade and specialization. Money is actually imperative to a functioning society.
Trade and specialization increase efficiency and make the world a more abundant place.
Unfortunately, the money we have is not functional itself. There are over 100 fiat currencies in the world, Yen, Yuan, USD, Euro, and a hundred more.
So while there is more abundance for some, the abundance is actually concentrated and many are exploited.
Each currency is dysfunctional in the same way. New units are created everyday, reducing the value of each existing Dollar, Euro, Yen, etc.
It is no wonder that there are so many issues in the world when an entity, (the Government) is able to print money and manipulate the market to purchase as much as they want for any pet project that a politician has.
Just 1 example that I am highly against is Social Security.
I went through and created a hypothetical person who started working in 1984 at the age of 25 (after being born in 1959).
If that person started making $10k in 1984 that would be equivalent to $30k/year in 2024.
I gave this person a 3% raise a year. You can see that in the “income column” below. So this person would have ended working in 2024 with a salary of $32k/year (being 65 years old).
The next column shows the 12.5%/year that this person + their employer is paying into Social Security. After 40 years this person would have paid $98k into Social Security.
I went through and put all the earnings data into the Social Security website benefit calculator, found here.
https://www.ssa.gov/benefits/retirement/planner/AnypiaApplet.html
It provided an estimate of $1,378/month or $16,536/year.
I provided an alternative column, where you would instead take that 12.5%/year and invest that in the S&P 500 for 40 years.
As of January 26, 2024, the S&P 500’s price is 4,890.97. If you invested $100 in the S&P 500 at the beginning of 1984, you would have about $6,606.25 at the end of 2023, assuming you reinvested all dividends. This is a return on investment of 6,506.25%, or 11.14% per year.
This person would have $1,074,860.37 in their 401k. They could safely withdraw $42,944/year from this (4%) as well as having a portfolio worth $1 million dollars! This is making a relatively low $30k per year equivalent for 40 years!
But most people I know who have made $30k a year for 40 years do not have a million dollar portfolio. Why is that?
It’s because they are unable to invest 12% of their salary a year, because it is required to go to the government and the Social Security Fund. This is robbing millions of workers of $25k/year in their retirement.
You could go through this same exercise. Simply go to https://www.ssa.gov/benefits/retirement/planner/AnypiaApplet.html
And input the dollar amount in the table for each year to find the benefit.
This is bad enough for a $30k/year equivalent worker. The more money you make though, the worse of a deal Social Security is. This is because of the “knee points” in the Social Security return table. The more you pay in, the less you get out. https://retireby40.org/early-retirement-impact-social-security-benefit/
While Social Security being a terrible return on your money is something of a first world problem, there are plenty of other instances of money losing value in other countries that really hurts people in those countries.
You can read from Alex Gladstein to learn about some of those.
“The rate of inflation in the U.S. is paltry compared to many other countries worldwide. The chief strategy officer for the Human Rights Foundation, Alex Gladstein highlighted this issue on Monday in a series of tweets. Gladstein is also a bitcoin (BTC) proponent and has been an evangelist for the leading crypto asset for quite some time.
“Many might think that extreme inflation is a rare occurrence in today’s modern world,” Gladstein said to his 27,000 Twitter followers on Monday. “That’s simply not the case. There are 1.2 billion people currently living in countries experiencing double or triple-digit inflation,” Gladstein insisted.”
MyWheelLife.com 